Remember the middle class?

Our opinion: The latest economic news ranges from bad to worse. How about an election that’s dedicated to restoring the American standard of living?

Now here’s some summer reading, America, from the Federal Reserve. The dry prose and irrefutable data in the report “Changes in U.S. Family Finances from 2007 to 2010” fall just short of being an obituary for the middle class.

The irrepressibly dreary conclusion: All the gains the typical middle-class family had made over the past two decades have been wiped out in an economic crisis. It’s like a sequel to last summer’s downer — a Census Bureau report that found poverty rates soaring and incomes in decline.

Incomes are still down. Just five years ago, the median family income was $49,600 in inflation-adjusted dollars. By 2010, it was down to $45,800 — and with no subsequent sign of recovery.

The situation is even worse, however, thanks to the erosion of the primary assets of what’s left of the middle class, namely the houses it owns. The real estate crash is directly responsible, the Fed says, for three-quarters of the decline in median family net worth.

How bad was the hit overall?

The median family’s net worth is down almost 40 percent, — from $126,400 in 2007 to $77,300 in 2010. That’s a much bigger loss than what was sustained by either the rich or the notably worse off.

Oh, and Americans tend to be as deeply in debt as they ever were, and repaying more than ever in college loans — to cover tuition costs that are soaring, in large part to state government budget cuts.

Let’s not forget health care, either. The price of that is expected to continue to exceed overall economic growth for as long as any of the experts can predict.

We could go on, but surely you get the picture. The bigger issue is what, if anything, might come of this chronicle of middle-class woes, especially during what’s shaping up to be a very competitive presidential race.

The devastating impact that the collapse of the housing market has had on the American standard of living ought to be an urgent call for mortgage relief. So much money is being wasted repaying loans that exceed the value of people’s houses that recovering from a lost two decades seems almost futile. About 8 million Americans are on the verge of foreclosure. Another 11 million have mortgages that are underwater to the tune of about $45,000 to $50,000.

Yet the best President Obama can seem to do is push ahead with a rather modest mortgage relief program — an average of about $20,000 for about a million homeowners — that required an end run around the Republican resistance in Congress.

Brace yourselves, then, for a campaign in which Mr. Obama has to defend not having done enough — to a Republican opposition that didn’t want him to do anything.

The issue of declining income will be subjected to similarly misguided politics. It’s because of a lack of jobs so severe that 23 million Americans are looking in vain for full-time work, of course, that so many middle-class households are trying to make do with less.

Yet here’s Mr. Obama, who otherwise might be fairly chided for proposing a jobs program that’s not ambitious enough, able to just as fairly criticize Mitt Romney and the Republicans for refusing to support what he has been pushing for a year.

The failure to address the ever-escalating burdens of student loans and college costs is yet another issue likely to make for a debate that misses the large point.

The health care crisis, meanwhile, will require a debate about restructuring Medicare and Medicaid, huge entitlement programs disproportionately financed by the middle class.

What the country needs is a campaign dedicated to a restoration of the standard of living the middle class once enjoyed. Anyone who disputes that ought to read the Fed’s report — in dismay, not denial.

8 Responses

What you have said is correct. What we need to is to face the reality that government that there are severe problems with our political system. Nationally we meddle in the Middle East and then have to deal with the internal security problems that that are a result of our meddling. Locally we have a graduation rate of about 50%. Statewide we have approximately 30% of those who graduate are prepared to enter college. As a society we must learn to call self serving rationales for government actions that serve only the minority what they are, so much organic matter associated with the digestion activities of bulls. As an example of government spending of our money by the state that should be called by the right name I cite to subsidize the solar power in “sunny” New York.

For those who conclude that I am a nut you may be right, but as you drive to work on roads that are maintained so as to stimulate the businesses of those who do front end alignments you might consider that nuts can be on to something.

You neglect to mention the numerous bills that have passed the House and Harry Reid refuses to bring to the floor. The ever increasing costs of health care in part can be directly attribute to PPACA and the numerous state mandates for ever expanding coverage. Do you really think that the insurance companies should just eat that cost? Of course not; those mandates have to be paid for so increase in premiums. We all understand how bias this paper is but when or until you start railing on the do nothing Senate (Reid and Schmuer) we will continue to consider your opinion useless.

This is on point. I really don’t care whether or not someone has a D or and R after their name. Most Americans base their opinions on results and how they were acheived, sadly neither side of the aisle seems to understand what real Americans are going through. I can’t even remember how many times I’ve voted for someone based only on my belief that they’ll do less harm then their opponent.

“…a campaign in which Mr. Obama has to defend not having done enough — to a Republican opposition that didn’t want him to do anything.” Tell that to a Republican and you get an entirely different take – what a job-killer government healthcare is, not extending the Bush tax-cuts is bad for the ‘job-creators’ (remember that one?), and the rest of the excuses that maintain an unbalanced economic model that threatens to turn the country upside down, creating a lot of poorer people and the potential for street violence in this country the like of which has not been seen since the 60s. No one can predict the future but if you aren’t very uncomfortable about where this country is going, you are simply not paying attention. And if you are not willing to do something about correcting it, you will unquestionably live with the consequences.

President Obama must surely regret having squandered the first 2 years of his term, in which he enjoyed Democrat majorities in BOTH houses of Congress, on his failed “stimulus” and matters other than the economy. He is now paying the political price for having wasted that time. His popularity, and that of his policies, are no where near the levels of the 2008 campaign.

As we wait for the Supreme Court’s decision as to whether the government can force people to buy guns (because they may one day need them), to buy electric cars (because they may one day need them), and to buy health insurance (because they may one day need it), we can ponder why Mr Obama wasted so much time in addressing the terrible economy that we have endured for the last several years.

As candidate Clinton reminded us frequently during his run for the White House: “It’s the economy, stupid!” How President Obama could have ignored this obvious truth is hard to comprehend.